Not Sure Where to Start? Here Are the Most Popular ETFs to Get You Started

I'm sure you've heard it before:

"ETFs are your best friends in the market."

But what does that actually mean? I mean sure, they sound like a pretty sound investment, but which ones are you supposed to pick out of the thousands that exist? In this article, we'll answer these questions and more.

Disclaimer: This article is not intended to be investment advice. Kidconomy isn't writing this to “sell” you on any of the following funds. Rather, we’re writing this piece to provide you with a basic understanding of some of the most popular ETFs out there, ultimately allowing you to feel more confident and informed when beginning on your investment journey.

Now, with that out of the way, let's get started.

What's an ETF again?

Good question. Before picking out funds, it's important to understand what exactly they're doing. An ETF is like a basket of stocks that you can buy or sell during the day, just like a regular stock. However, instead of just one company, some ETFs can hold thousands. Some ETFs track an index (like the S&P 500), and others are actively managed, which means a fund manager (or multiple) pick what goes in the basket hoping to beat the market.

Popular Indexes (and Funds That Track Them)

Now that you know what an ETF is, let’s look at the most popular ones. We'll start with ETFs that track major market indexes. These ETFs don’t try to beat the market, they just try to match it. This may sound boring, but the benefit of these funds is that they charge exceptionally low expense ratios, or management fees. That's a big advantage for a long term investor.

Index	What It Tracks	Popular ETFs That Track It (Ticker — Issuer)
S&P 500	500 of the biggest U.S. companies	SPY — State Street VOO — Vanguard IVV — iShares
Nasdaq-100	100 of the largest non-financial companies on the Nasdaq (mostly tech)	QQQM — Invesco
Dow Jones Industrial Average	30 large, well-known U.S. companies	DIA — SPDR
Total U.S. Market	Nearly every publicly traded U.S. company	VTI — Vanguard ITOT — iShares SCHB — Charles Schwab
Russell 2000	2,000 small-cap U.S. companies	IWM — iShares VTWO — Vanguard
International Markets	Stocks outside the U.S.	VXUS — Vanguard IEFA — iShares VEA — Vanguard
Bonds	U.S. bonds — both government and corporate	BND — Vanguard AGG — iShares

What about ETFs that don't track an index?

Not all ETFs follow an index like the S&P 500. Some are actively managed, meaning real people are picking and choosing the investments in hopes of beating the market.

These ETFs are usually more specialized and can sometimes be a lot riskier.

ETF	What It Does
ARKK (ARK Innovation ETF)	Focuses on new and innovative tech. Managed by Cathie Wood.
JEPQ (JPMorgan Nasdaq Equity Premium Income ETF)	Owns lots of big tech stocks but also generates income by selling options.
HDV (iShares High Dividend ETF)	Invests in companies with strong, stable dividend payouts.
FDG (Fidelity Growth Opportunities ETF)	Actively picks high-growth companies.
PDBC (Invesco Optimum Yield Diversified Commodity Strategy ETF)	Invests in a mix of commodities like oil, gold, and wheat.

Final Thoughts

ETFs really are your best friend when getting started in the stock market. They're cheap and diversify your portfolio across hundreds if not thousands of companies in seconds. For long-term investors, we would recommend simply investing in a passively managed fund that tracks an index, but regardless of what you choose to do, the key is to know what you’re buying and why. Always have a plan, and stick to it.

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Did we leave any funds off the list? Let us know down below.